The highest bail amount set in the U.S. was $100 million for the bail of Galleon Group founder Raj Rajaratnam. The bond was secured by $20 million in property and cash. Rajaratnam was arrested in October 2009 on insider trading charges: fourteen counts of conspiracy and securities fraud.

Given Rajaratnam’s assets, the judge determined that $100 million bail would be enough to incent the accused to come to court.

Apparently that was a sufficient amount to prevent Rajaratnam from fleeing – in October 2011 he was sentenced to 11 years in Massachusetts prison, in addition to a $63.8 million fine. The SEC also fined Rajaratnam $92.8 million.

Each state has different rules for commercial bail bonds.  Illinois, Kentucky, Oregon and Wisconsin have banned commercial bail bonds.  Usually those states provide an alternative to commercial bail, such as paying 10% of the full bail amount to the court.  Some allow AAA and other organizations to provide bail services under their insurance or membership agreements.

In most states where commercial bail bonds are allowed, bail bond dealers must be licensed to do business in their state, and those licensing requirements do vary.  Generally though, there are educational requirements that must be met.  Once the required classes have been taken, and any other requirements have been met, a license application is submitted to the state insurance office.  Be sure to check the specific requirements and rules with your state licensing agency if you are interested in becoming a bail bondsman.

Acting as a bail bondsman without a license can lead to arrest and criminal prosecution.  Some states have been noticing an increase in unlicensed bail bondsman criminal cases. For example, Department of Insurance investigators in North Carolina reported a 66% increase in such cases in recent years.  The requirements that a bail bondsman be licensed are for the purpose of protecting you, the consumer, during a typically difficult and stressful time.  Make sure any bail bondsman you use for bail services is properly licensed.

When a judge decides at a bail hearing whether bail will be granted, and if so, how much, some of the factors he or she considers are the nature of the crime, the character of the defendant, the likelihood the defendant will fail to appear in court for his or her trial and related hearing, and the danger to the community if the defendant is released.

An example of a judge taking evidence of good character into account was in the news recently.  Last month, in Washington DC, a 22 year old man driving a car hit someone driving a scooter, sending the driver through the windshield of his car.  He failed to stop.  He dragged the scooter about a mile, with sparks flying, before he was stopped by armed police.  According to police, he reeked of alcohol.  He did not know his location, asking where in Pennsylvania he was.  The driver of the scooter died later that night.

The judge granted $15,000 bail.  The defense argued that the defendant had been an honor student, had never been in trouble with the law, and that he had been an Eagle Scout.

Keep in mind that the purpose of the bail system is to ensure that defendants appear in court, to protect the community from dangerous defendants, and to prevent interference with victims and witnesses.   The US Constitution requires that bail “not be excessive.”  Bail should not be granted or set higher than necessary to punish the defendant – after all, a defendant is considered innocent until proven guilty; and if a judge feels that a defendant will appear at hearings, and is not a danger to the community, pre-trial release should be granted, with an appropriate bail amount.  Granting pre-trial release also relieves the burden on the jail system, which costs about $60/day per inmate nationally.